Capitalism, Confucianism, and how big Business can Learn From Sun Tzu

We must realize that we are part of a global economy ... and start acting like it.

Since the last election, we have seen the rise of nationalism, a dangerously isolationist political philosophy and a dismissive attitude towards China. Those who haven’t taken the time to study the issue still believe China to be the center of knock-off handbags and cheap manufacturing, but as I wrote in World Policy Journal, China’s growth in research and development, focus on an educated workforce, and a level of innovation that rivals Silicon Valley during the dotcom boom has changed how we must look at China, and that an isolationist approach will be dangerous – and not helpful – to the United States.

While living in Asia, I noticed something different about how Asian people eat at restaurants in some countries. While it was at first hard to get used to, I soon realized that this difference made for a much more pleasant experience. In the United States, people at restaurants order their own dishes. And while husbands and wives may take nibbles off each other’s plates, for the most part, we Westerners regard the dishes in front of us as proprietary. People in Thailand on the other hand, simply order several different dishes, which are placed communally on the table for everyone to enjoy.

Business, like food, doesn’t have to be a zero-sum game, and in the dotcloud world, we are starting to see the benefit of this Confucian ideal. We tend to think of millionaires and billionaires, successful Wall Streeters, and captains of industry having achieved their success by “winning,” “playing hardball,” and approaching business as a game of winners and losers.

Business today – influenced by the cloud business model, a global focus, and a “lean” model that allows businesses to do more with less, while incorporating many more partners and fewer direct employees – is no longer a zero-sum game of winners and losers. Even here in the West, we are beginning to approach business with that Confucian mindset of winners and winners.

Making America Great Again

Political bluster about “making America great again,” and talk of “American exceptionalism” is mostly mythology, based on an obsolete mindset and a nostalgia for a brief time when all other countries in the world were still reeling from World War Two, and manufacturing in the United States reigned supreme. The period between 1946 and 1979 – the Golden Age of the American Working Class – was mostly an anomaly from a historical perspective, and now, other countries are catching up.

We like to think that American, union-driven manufacturing employees are better at their jobs than workers in any other countries. It feels good to say that this is so, but the objective reality is that workers in Scandinavia, China, Vietnam, and many other countries are just as good.

China in particular, is outpacing the United States in terms of original innovation and patents, and while Chinese students are studying science and technology to prepare for the inevitable dotcloud revolution, American students are getting degrees in Medieval Folklore. American companies aren’t just sending their manufacturing operations to China because it is cheaper – this is happening because there aren’t enough engineers in the United States to get the job done.

What Global Emergence Means to Smaller Dotcloud Businesses

Nearly any large corporation in the United States now not only has competitors in China, but partners as well, and more often than not, a physical presence. No artificial tariff, no amount of political bluster, and no grassroots “they took our jobs” outrage is going to change that.

Are these global inevitabilities something small dotcloud startups have to worry about? If you’re running your company out of your garage and have three employees, what does China have to do with you? The answer is, “Plenty.” Look at any Internet conversation thread on the subject, and the overwhelming sentiment is the belief that Chinese-made goods are low-quality copies of good ol’ American manufacturing. That was in fact, the case at one time, but it is no longer – we just don’t want to admit that the Chinese are getting as good as us in this area.

Realizing that we are in a global economy, and products from other countries – including China – can be just as good as products coming from the U.S. and probably cheaper, is the first step towards launching a realistic marketing campaign that takes meaningful foreign competition into consideration. Even before the dotcloud, the most strategic marketers adhered to this primary rule: Acknowledge your competitor’s strengths. Sun-Tzu couldn’t have said it better. In The Art of War, Master Sun said:

He who exercises no forethought but makes light of his opponents is sure to be captured by them.

This is the biggest risk on the part of American marketers who still labor under the outdated belief that Chinese manufacturing and Chinese business is inherently inferior.

First of all, even the smallest dotcloud business today can have a global reach. Second, the increased amount of competition both at home and abroad means that innovation is often short-lived, and marketing is taking on even greater importance as businesses see a greater need to differentiate themselves in an increasingly commoditized business climate. Today’s innovator may be tomorrow’s also-ran, and often, the only thing to set you apart is your voice.

About Dan Blacharski

Dan Blacharski lives in South Bend, Indiana with his wife and Boston Terrier, where he writes about business, tech, and men’s issues, and is the editor of Cloudipedia.com. He is over 50 years old and still wears hats.

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